Ukraine hopes for access to Russian pipelines

A senior official said on Tuesday

Kyiv hopes a deal to allow Russia to join the World Trade Organisation will enable Ukraine to secure direct access to Russian pipelines carrying gas from Central Asia, a senior official said on Tuesday, according to Reuters.

"Within the context of a free trade agreement (with Russia), we are regulating only trade in goods, not trade in services," Deputy Economy Minister Valery Pyatnitsky told reporters.

"But what we are really interested in is the Russian services market. And the most critical thing is access to pipelines. How are we to ensure free transit of gas and oil through Russian territory? How are we to receive goods?"

Ukraine joined the WTO in May after nearly 15 years of talks, completing the process before Russia, and said it would use its new position to settle issues on gas imports.

All imports of gas, including cheaper supplies from Turkmenistan in ex-Soviet Central Asia, pass through Russian territory.

The price Ukraine pays for gas supplied by Russia has shot up from $50 per 1,000 cubic metres in 2005 to $95 a year later and now stands at $179.50.

Russian gas export monopoly Gazprom (GAZP.MM: Quote, Profile, Research) said last month it wanted to raise the price further to European levels of $400-500 by next year.

This sent a tremor of worry through the European Union, which receives a quarter of its gas supplies from Russia. Around 80 percent is shipped through Ukraine by pipeline.

EU countries fear rows over gas prices between Moscow and transit countries that could lead to supply interruptions.

Russia halted gas flows to Ukraine for several days in a dispute over pricing in early 2006 which had a knock-on effect for gas passing through Ukraine and on to European customers. Flows have periodically been reduced since in new pricing spats.

Ukrainian Prime Minister Yulia Tymoshenko says she has reached an understanding with her Russian opposite number, Vladimir Putin, to raise Ukrainian prices over a number of years.